Macroeconomics Exam Three
The aggregate-expenditures model and the aggregate demand curve can be reconciled because, other things equal, in the aggregate-expenditures model, a.) changes in the price level have no effect on the equilibrium level of GDP. b.) an increase in the price level increases the real value of wealth. c.) the level of aggregate-expenditures and therefore the level of real GDP vary inversely with the price level. d.) the level of aggregate-expenditures and therefore the level of real GDP vary directly
.) the level of aggregate-expenditures and therefore the level of real GDP vary inversely with the price level.
(Last Word) In 1936, British economist, John Maynard Keynes, developed the ideas underlying the aggregate-expenditures model in his book, a.) General Theory of Employment, Interest, and Money. b.) Principles of Economics. c.) Freakonomics. d.) The Wealth of Nations.
a.) General Theory of Employment, Interest, and Money. In 1936 British economist John Maynard Keynes offered an explanation for cyclical unemployment and recessions. In his General Theory of Employment, Interest, and Money, Keynes criticized the foundations of classical theory and developed the ideas underlying the aggregate-expenditures model.
The basic equation of monetarism is a.) MV = PQ. b.) Sa + T + M = Ig + G + Xn. c.) V = M ÷ PQ. d.) Ca + Ig + Xn + G = GDP.
a.) MV = PQ.
The equation of exchange indicates that a.) MV = PQ. b.) other things equal, an increase in the demand for money will increase P and/or Q. c.) the velocity and the supply of money vary directly with one another. d.) MP = VQ.
a.) MV = PQ.
Which of the following fiscal policy changes would be the most expansionary? a.) a $40 billion increase in government spending b.) a $20 billion tax cut and $20 billion increase in government spending c.) a $10 billion tax cut and $30 billion increase in government spending d.) a $40 billion tax cut
a.) a $40 billion increase in government spending Using an MPC of 0.75 and MPS of 0.25 there will be a multiplier of 4. The $40 billion increase in government spending would expand GDP by $160 ($40 × 4).A decrease in taxes of $20 billion along with a $20 billion increase in government spending will increase GDP by $140 [(20 × 4) = $80] + [$20 × 0.75 = $15 × 4 = $60] $80 + $60 = $140. A $10 billion tax cut and $30 billion increase in government spending will increase GDP by $150 [(30 × 4) = $120] + [$10 × 0.75 = $7.5 × 4 = $30] $120 + $30 = $150. A $40 billion tax cut will increase GDP by $120 [$40 × 0.75 = 30 × 4 = $120.]
Refer to the diagram. The initial aggregate demand curve is AD1, and the initial aggregate supply curve is AS1. In the long run, demand-pull inflation is best shown as a.) a shift of aggregate demand from AD1 to AD2, followed by a shift of aggregate supply from AS1 to AS2. b.) a move from d to b to a. c.) a shift of aggregate supply from AS1 to AS2, followed by a shift of aggregate demand from AD1 to AD2. d.) a move from a to d.
a.) a shift of aggregate demand from AD1 to AD2, followed by a shift of aggregate supply from AS1 to AS2.
If the marginal propensity to consume is 0.80 and both taxes and government purchases increase by $50 billion, GDP will a.) increase by $50 billion. b.) decrease by $50 billion. c.) increase by $10 billion. d.) decrease by $10 billion.
a.) increase by $50 billion.
If consumers expect their future real income to rise, they will a.) tend to spend more of their current incomes now. b.) tend to spend less of their current incomes now. c.) not change their current spending plans. d.) tend to save more money now.
a.) tend to spend more of their current incomes now. Changes in expectations about the future may alter consumer spending. When people expect their future real incomes to rise, they tend to spend more of their current incomes. Thus, current consumption spending increases (current saving falls), and the aggregate demand curve shifts to the right.
Most monetarists would say that a.) the MV = PQ equation provides a better understanding of the macroeconomy than does the Ca + Ig + Xn + G = GDP equation. b.) most changes in the price level are explainable by changes in the level of real output. c.) the velocity of money is quite unstable. d.) all of these are true.
a.) the MV = PQ equation provides a better understanding of the macroeconomy than does the Ca + Ig + Xn + G = GDP equation.
New classical economists say that an unanticipated increase in aggregate demand first a.) increases the price level and real output, and then reduces short-run aggregate supply such that the economy returns to the full-employment level of output. b.) increases the price level and real output, and then increases long-run aggregate supply. c.) increases long-run aggregate supply, and then increases the price level and real output. d.) reduces short-run aggregate supply, and then reduces long-run a
a.) increases the price level and real output, and then reduces short-run aggregate supply such that the economy returns to the full-employment level of output.
Refer to the diagram. The initial aggregate demand curve is AD1 and the initial aggregate supply curve is AS1. Cost-push inflation in the short run is best represented as a a.) leftward shift of the aggregate supply curve from AS1 to AS2. b.) rightward shift of the aggregate demand curve from AD1 to AD2. c.) move from d to b to a. d.) move from d directly to a.
a.) leftward shift of the aggregate supply curve from AS1 to AS2.
An appropriate fiscal policy for a severe recession is a.) a decrease in government spending. b.) a decrease in tax rates. c.) appreciation of the dollar. d.) an increase in interest rates.
b.) a decrease in tax rates. An appropriate fiscal policy is for the government to decrease tax rates, so that disposable income will increase, which will cause consumption and saving to rise, and eventually cause a rightward shift in the aggregate demand curve, eliminating the recession.
Monetarists and other new classical economists believe that a monetary rule will prevent the government from trying to a.) "manage" aggregate supply and causing cost-push inflation. b.) aggregate demand and causing more instability than it cures. c.) the foreign exchange markets to alleviate a trade imbalance. d.) the stock market to keep it from crashing.
b.) aggregate demand and causing more instability than it cures. Monetarists and other new classical economists believe that policy rules will reduce instability in the economy. They believe that such rules will prevent government from trying to "manage" aggregate demand. That outcome is desirable because, in their view, such management is likely to cause more instability than it cures.
In the monetarist equation of exchange, MV is the monetarist counterpart of a.) money supply. b.) aggregate expenditures. c.) total saving. d.) government spending.
b.) aggregate expenditures.
Refer to the diagram. If the aggregate supply curve shifted from AS0 to AS1 and the aggregate demand curve remains at AD0, we could say that a.) aggregate supply has increased, equilibrium output has decreased, and the price level has increased. b.) aggregate supply has decreased, equilibrium output has decreased, and the price level has increased. c.) an increase in the amount of output supplied has occurred. d.) aggregate supply has increased and the price level has risen to G.
b.) aggregate supply has decreased, equilibrium output has decreased, and the price level has increased.
Rational expectations theory is based on the assumption that a.) wages and prices are flexible upward but inflexible downward. b.) both product and resource markets are very competitive. c.) product markets are competitive, but resource markets are monopolistic. d.) both product and resource markets are monopolistic.
b.) both product and resource markets are very competitive.
The mainstream view of macro instability is that a.) changes in the money supply directly cause changes in aggregate demand and thus cause changes in real GDP. b.) changes in investment shift the aggregate demand curve and thus cause changes in real GDP. c.) bursts of innovation put the economy on an unsustainable growth path, eventually producing recession. d.) changes in technology and resource availability are the two main sources of fluctuations of real GDP.
b.) changes in investment shift the aggregate demand curve and thus cause changes in real GDP.
A potential cause of stagflation is a.) agricultural surpluses. b.) declining productivity. c.) improving labor productivity. d.) a rise in the value of the dollar.
b.) declining productivity.
If a country's MPC is .8 and exports increased by $4 billion while imports increased $6 billion, GDP will a.) increase $10 billion. b.) decrease $10 billion. c.) increase $4 billion. d.) decrease $6 billion.
b.) decrease $10 billion. The multiplier is 5 [1 ÷ (1 - MPC)]. Net exports changed by −$2 billion ($4 - $6). Multiply the change in net exports of −$2 billion times the multiplier: −$2 × 5 = −$10 billion.
The determinants of aggregate demand a.) explain why the aggregate demand curve is downward-sloping. b.) explain shifts in the aggregate demand curve. c.) demonstrate why real output and the price level are inversely related. d.) include input prices and resource productivity.
b.) explain shifts in the aggregate demand curve.
New classical economists a.) stress the importance of federal budget deficits in stimulating aggregate demand. b.) hold that, left alone, the economy gravitates to its full-employment level of output. c.) emphasize tax cuts as a means of increasing aggregate supply. d.) advocate active use of monetary policy to stabilize the economy.
b.) hold that, left alone, the economy gravitates to its full-employment level of output.
An increase in the aggregate-expenditures schedule a.) increases aggregate demand by the amount of the increase in aggregate-expenditures only. b.) increases aggregate demand by the amount of the initial increase in aggregate-expenditures times the multiplier. c.) decreases aggregate demand by the amount of the increase in aggregate-expenditures. d.) decreases aggregate demand by the amount of the initial increase in aggregate-expenditures times the multiplier.
b.) increases aggregate demand by the amount of the initial increase in aggregate-expenditures times the multiplier.
The aggregate supply curve (short-run) a.) graphs as a horizontal line. b.) is steeper above the full-employment output than below it. c.) slopes downward and to the right. d.) presumes that changes in wages and other resource prices match changes in the price level.
b.) is steeper above the full-employment output than below it.
The expenditure multiplier concept of the aggregate-expenditures model a.) is not at all relevant in the AD-AS model. b.) magnifies the shifts of the aggregate demand curve. c.) explains movement up or down the aggregate demand curve. d.) reverses the shift of the aggregate demand curve.
b.) magnifies the shifts of the aggregate demand curve.
The macroeconomic policy view that is called new classical economics is shared by a.) three groups: mainstream macroeconomics, monetarism, and rational expectations. b.) monetarism and rational expectations. c.) rational expectations and mainstream macroeconomics. d.) mainstream macroeconomics and monetarism.
b.) monetarism and rational expectations.
Demand-pull inflation in the short run raises the price level and a.) real wages. b.) real output. c.) the unemployment rate. d.) nominal wages.
b.) real output. An increase in aggregate demand drives up the price level and increases real output in the short run. But in the long run, nominal wages rise and the short-run aggregate supply curve shifts leftward. Real output then returns to its prior level, and the price level rises even more.
The accompanying graph depicts an economy in the a.) immediate short-run. b.) short-run. c.) immediate long-run. d.) long-run.
b.) short-run.
In the long run, demand-pull inflation a.) starts out with a shift in the AS curve but no shift of the AD curve. b.) starts out with a rightward shift in the AD curve, followed by a resulting leftward shift of the short-run AS curve. c.) starts out with a leftward shift in the AD curve, followed by a resulting rightward shift of the short-run AS curve. d.) involves a shift of the AD curve only, with no shift of the AS curve.
b.) starts out with a rightward shift in the AD curve, followed by a resulting leftward shift of the short-run AS curve.
Refer to the graphs, where the subscripts on the labels denote years 1 and 2. From the graphs we can conclude that from year 1 to year 2 a.) the economy recovered from a recession. b.) the economy experienced economic growth and inflation. c.) output grew and the unemployment rate fell. d.) the government engaged in expansionary fiscal and monetary policies.
b.) the economy experienced economic growth and inflation.
Per-unit production cost is a.) real output divided by inputs. b.) total input cost divided by units of output. c.) units of output divided by total input cost. d.) a determinant of aggregate demand.
b.) total input cost divided by units of output. Per-unit production cost is the cost of producing each unit. Per-unit production cost = total input cost ÷ total output.
If the MPC in an economy is 0.80 and aggregate expenditures increase by $2 billion, then equilibrium GDP will increase by a.) $2.8 billion. b.) $4 billion. c.) $10 billion. d.) $16 billion.
c.) $10 billion. Find the multiplier with the formula, Multiplier = 1 ÷ 1 − MPC, Multiplier = 1 ÷ 1 − 0.80 = 5. Then multiply the increase in aggregate expenditures by the multiplier for the answer. Equilibrium GDP will increase by 5 × $2 billion.
If a country's MPC is 0.9 and exports increased by $12 billion while imports remained the same, GDP will increase by a.) $0.9 billion. b.) $12 billion. c.) $120 billion. d.) $10.8 billion.
c.) $120 billion. The multiplier is 10 [1 ÷ (1 - MPC)]. Multiply the increase in net exports of $12 times the multiplier: $12 × 10 = $120 billion.
In the diagram, a shift from AS1 to AS2 might be caused by a.) stricter government regulations. b.) an increase in the prices of imported resources. c.) a decrease in the prices of domestic resources. d.) an increase in business taxes.
c.) a decrease in the prices of domestic resources.
If net exports are positive, a.) the equilibrium GDP must be greater than the full-employment GDP. b.) imports must exceed exports. c.) aggregate expenditures are greater at each level of GDP than when net exports are zero or negative. d.) some other component of aggregate expenditures must be negative.
c.) aggregate expenditures are greater at each level of GDP than when net exports are zero or negative.
One timing problem in using fiscal policy to counter a recession is the "operational lag" that occurs between the a.) start of the recession and the time it takes to recognize that the recession has started. b.) start of a predicted recession and the actual start of the recession. c.) time fiscal action is taken and the time that the action has its effect on the economy. d.) time the need for the fiscal action is recognized and the time that the action is taken.
c.) time fiscal action is taken and the time that the action has its effect on the economy.
Monetarists believe that a.) prices and wages are inflexible or sticky. b.) both product and resource markets are monopolistic. c.) velocity is relatively stable. d.) the economy is more stable when active fiscal and monetary policy are used.
c.) velocity is relatively stable.
Refer to the graphs. An increase in the economy's human capital would shift curve a.) AB to CD and curve Y to X. b.) CD to AB and curve X to Y. c.) X to Y, while leaving curve AB in place. d.) AB to CD and curve X to Y.
d.) AB to CD and curve X to Y. Economic growth driven by supply factors (such as improved technologies or the use of more or better resources) shifts an economy's production possibilities curve outward, as from AB to CD. The same factors shift the economy's long-run aggregate supply curve to the right, as from curve X to curve Y.
(Last Word) Say's law and classical macroeconomics were disputed by a.) Adam Smith. b.) Jeremy Bentham. c.) John Stuart Mill. d.) John Maynard Keynes.
d.) John Maynard Keynes.
The public debt is held as a.) U.S. securities, corporate bonds, and common stock. b.) Federal Reserve Notes. c.) U.S. gold certificates. d.) Treasury bills, Treasury notes, Treasury bonds, and U.S. savings bonds.
d.) Treasury bills, Treasury notes, Treasury bonds, and U.S. savings bonds.
Which of the following represents the most contractionary fiscal policy? a.) a $30 billion tax cut b.) a $30 billion increase in government spending c.) a $30 billion tax increase d.) a $30 billion decrease in government spending
d.) a $30 billion decrease in government spending
As it relates to the aggregate-expenditures model, a leakage is a.) an addition of spending into the income-expenditure stream: any increment to consumption, investment, government purchases, or net exports. b.) a withdrawal of spending through taxes, government purchases, and exports. c.) when someone other than the intended recipient intercepts and cashes a government stimulus check. d.) a withdrawal of potential spending from the income-expenditures stream via saving, tax payments, or imports
d.) a withdrawal of potential spending from the income-expenditures stream via saving, tax payments, or imports. A leakage is a withdrawal of potential spending from the income-expenditures stream via saving, tax payments, or imports.
An increase in investment and government spending can be expected to shift the a.) aggregate-expenditures curve downward and the aggregate demand curve leftward. b.) aggregate-expenditures curve upward and the aggregate demand curve leftward. c.) aggregate-expenditures curve downward and the aggregate demand curve rightward. d.) aggregate-expenditures curve upward and the aggregate demand curve rightward.
d.) aggregate-expenditures curve upward and the aggregate demand curve rightward.
(Consider This) The negative supply shock that occurred because of the lockdowns in response to the COVID pandemic in the spring of 2020 caused a.) aggregate supply to shift leftward. b.) a decrease in real GDP. c.) rising consumer prices. d.) all of these choices are correct.
d.) all of these choices are correct. As COVID-19 spread during the spring of 2020, governments around the world imposed strict lockdowns. The lockdowns acted as a major negative supply shock as tens of millions of people were prevented from going to work. Reductions in productive capacity shifted aggregated supply leftward, resulting in a decrease in real GDP in the spring of 2020 followed over the next year by steadily increasing consumer prices.
John Maynard Keynes developed the ideas underlying the aggregate-expenditures model a.) in the 1960s. b.) in the 1980s. c.) as a reinforcement of Say's Law. d.) as a critique of classical economics.
d.) as a critique of classical economics.
An adverse aggregate supply shock a.) automatically shifts the aggregate demand curve rightward. b.) causes the Phillips Curve to shift leftward and downward. c.) can be caused by a boost in the rate of growth of productivity. d.) can cause stagflation.
d.) can cause stagflation.
Refer to the diagram. If the full-employment level of GDP is D, then it would be appropriate fiscal policy for government to a.) decrease spending and increase taxes. b.) decrease spending and decrease taxes. c.) increase spending and increase taxes. d.) increase spending and decrease taxes.
d.) increase spending and decrease taxes.
Expansionary fiscal policy is so named because it a.) involves an expansion of the nation's money supply. b.) necessarily expands the size of government. c.) is aimed at achieving greater price stability. d.) is designed to expand real GDP.
d.) is designed to expand real GDP.
The effect of contractionary fiscal policy is shown as a a.) rightward shift in the economy's aggregate demand curve. b.) rightward shift in the economy's aggregate supply curve. c.) movement along an existing aggregate demand curve. d.) leftward shift in the economy's aggregate demand curve.
d.) leftward shift in the economy's aggregate demand curve. Contractionary fiscal policy will shift the aggregate demand curve leftward.
The velocity of money is equal to a.) 1 ÷ MPS. b.) 1 ÷ reserve ratio. c.) M ÷ GDP. d.) none of these.
d.) none of these.
The theory of rational expectations calls for monetary policy rules because a.) of past policy errors. b.) policy tends to be countercyclical. c.) of the inability to time policy decisions. d.) of the reaction of the public to the expected effects of policy.
d.) of the reaction of the public to the expected effects of policy.
The real-business-cycle theory a.) is a monetarist view of the business cycle. b.) is the mainstream view of the business cycle. c.) assumes that the supply of money is constant. d.) says that macro instability results from shifts in the long-run aggregate supply curve.
d.) says that macro instability results from shifts in the long-run aggregate supply curve.
Mainstream economics views monetary policy as a a.) source of instability, similar to the view of monetarism. b.) stabilizing factor, similar to the view of monetarism. c.) source of instability, while monetarism views it as a stabilizing factor. d.) stabilizing factor, while monetarism views it as a source of instability.
d.) stabilizing factor, while monetarism views it as a source of instability.
The Laffer Curve is a central concept in a.) monetarism. b.) Keynesianism. c.) welfare economics. d.) supply-side economics.
d.) supply-side economics.
Mainstream economists support a.) adoption of a monetary rule for increases in the money supply. b.) elimination of efficiency wages and insider-outsider relationships. c.) the requirement that the government annually balance its budget. d.) the use of discretionary monetary and fiscal policy for achieving major economic goals.
d.) the use of discretionary monetary and fiscal policy for achieving major economic goals.
In the extended aggregate demand-aggregate supply model, a.) long-run equilibrium occurs wherever the aggregate demand curve intersects the short-run aggregate supply curve. b.) the long-run aggregate supply curve is horizontal. c.) the price level is the same regardless of the location of the aggregate demand curve. d.)long-run equilibrium occurs at the intersection of the aggregate demand curve, the short-run aggregate supply curve, and the long-run aggregate supply curve.
d.)long-run equilibrium occurs at the intersection of the aggregate demand curve, the short-run aggregate supply curve, and the long-run aggregate supply curve.
Suppose the full employment level of real output ( Q) for a hypothetical economy is $500, the price level ( P) initially is 100, and prices and wages are flexible both upward and downward. Refer to the accompanying short-run aggregate supply schedules. In the long run, a fall in the price level from 100 to 75 will a.) decrease real output from $500 to $440. b.) increase real output from $500 to $620. c.) change the aggregate supply schedule from (a) to (c) and produce an equilibrium level of rea
c.) change the aggregate supply schedule from (a) to (c) and produce an equilibrium level of real output of $500. In the short run, a decrease in the price level from 100 to 75 will move the economy from an output level of $500 to an output level of $440 while remaining on the short-run aggregate supply schedule AS (a). But now the economy is producing less than its potential output of $500. The demand for inputs is low, so input prices will begin to fall, including nominal wages, which decreases per-unit production costs causing producers to respond by producing more. In the long run, the short-run supply schedule will shift from AS (a) to AS (c), at the lower price level of 75 but back to the economy's full-employment level of $500.
The Great Recession of 2007-09 and the consequent policy response made the a.) actual budget deficit become very close to the cyclically-adjusted deficit during that period. b.) actual budget deficit shrink during that period. c.) cyclically-adjusted deficit grow during that period. d.) cyclically-adjusted budget balance turn positive during that period.
c.) cyclically-adjusted deficit grow during that period.
The crowding-out effect refers to the possibility that a.) when used simultaneously, expansionary fiscal and monetary policies are counterproductive. b.) the asset demand for money varies inversely with the interest rate. c.) deficit financing will increase the interest rate and reduce investment. d.) an increase in the supply of money will result in a decline in velocity.
c.) deficit financing will increase the interest rate and reduce investment
A private closed economy includes a.) households, businesses, and government, but not international trade. b.) households, businesses, and international trade, but not government. c.) households and businesses, but not government or international trade. d.) households only.
c.) households and businesses, but not government or international trade.
The crowding-out effect suggests that a.) increases in consumption are always at the expense of saving. b.) increases in government spending will close a recessionary expenditure gap. c.) increases in government spending may reduce private investment. d.) high taxes reduce both consumption and saving.
c.) increases in government spending may reduce private investment.
Discretionary fiscal policy refers to a.) any change in government spending or taxes that destabilizes the economy. b.) the authority that the president has to change personal income tax rates. c.) intentional changes in taxes and government expenditures made by Congress to stabilize the economy. d.) the changes in taxes and transfers that occur as GDP changes.
c.) intentional changes in taxes and government expenditures made by Congress to stabilize the economy.
(Consider This) The lockdowns that were imposed during the COVID-19 pandemic in 2020 acted like a a.) minor negative demand shock. b.) major positive demand shock. c.) major negative supply shock. d.) minor positive supply shift.
c.) major negative supply shock. As the COVID-19 virus spread worldwide, governments around the world imposed strict lockdowns during the spring of 2020. The lockdowns acted as a major negative supply shock since tens of millions of people were prevented from going to work. The general slowdown in spending; along with tens of thousands of businesses going bankrupt; caused a decline in productive capacity that shifted aggregated supply leftward.
Refer to the diagram. The initial aggregate demand curve is AD1, and the initial aggregate supply curve is AS1. In the long run, the aggregate supply curve is vertical in the diagram because a.) nominal wages and other input prices are assumed to be fixed. b.) real output level Qf is the potential level of output. c.) price level increases produce offsetting changes in nominal wages and other input prices. d.) higher-than-expected rates of actual inflation reduce real output only temporarily.
c.) price level increases produce offsetting changes in nominal wages and other input prices.
If the MPS in an economy is 0.40, government could shift the aggregate demand curve leftward by $100 billion by a.) increasing taxes by $100 billion. b.) reducing government expenditures by $250 billion. c.) reducing government expenditures by $40 billion. d.) increasing taxes by $500 billion.
c.) reducing government expenditures by $40 billion. Find the multiplier using the formula, 1 ÷ MPS, so the Multiplier = 1 ÷ 0.40 = 2.5. Then begin a process of elimination by first using the multiplier to find how much government expenditures need to decrease to get a decrease in aggregate demand of $100; so, $100 ÷ 2.5 = $40. And then determine how much taxes need to increase to get a left shift in aggregate demand using the multiplier of 2.5. So, $100 ÷ 2.5 = $40. But households use their income to both consume and save, so divide that amount by the MPC, $40 ÷ 0.60. (Recall that the MPC is found by subtracting the MPS from 1.) Then find your answer from the choices given.
if investment increases by $10 billion and the economy's MPC is 0.8, the aggregate demand curve will shift a.) leftward by $50 billion at each price level. b.) rightward by $10 billion at each price level. c.) rightward by $50 billion at each price level. d.) leftward by $40 billion at each price level.
c.) rightward by $50 billion at each price level. The multiplier is 5 [1 ÷ (1 − MPC)]. Multiply the increase in investment times the multiplier to find how much the AD curve will shift. It will shift rightward (an increase) by $50 billion ($10 × 5).
Refer to the diagram, in which T is tax revenues and G is government expenditures. All figures are in billions. If GDP is $400, a.) there will be a budget deficit. b.) there will be a budget surplus. c.) the budget will be balanced. d.) the macroeconomy will necessarily be in equilibrium.
c.) the budget will be balanced.
Since the Great Recession of 2007-2009 a.) the misery index has increased. b.) the misery index has remained stable. c.) the movement of the unemployment rate and inflation rate has been inconsistent with a stable Phillips Curve. d.) the movement of the unemployment rate and inflation rate has been consistent with a stable Phillips Curve.
c.) the movement of the unemployment rate and inflation rate has been inconsistent with a stable Phillips Curve.
